SSAB’s transformation

SSAB has taken a policy decision to transform all our sites to fossil-free steel production. Our globally recognized brands such as Hardox^® wear plate will be made with a significantly reduced carbon footprint. Our 140 years of experience ensures that the quality of all our well-known steels remains the same.

As a market leader in premium steels and steel plate in our Nordic and U.S. home markets, SSAB is responsible for the impact we make on our surroundings. We’re proud to already have reached this far in our journey towards a fossil-free future.

SSAB’s transformation of its Nordic production system is the first true steelmaking transformation in centuries. All five blast furnaces in Sweden and in Finland will be replaced by more flexible and cost-efficient mini-mills that run on electricity.

Luleå in Sweden and Raahe in Finland will get new mini-mills that are at the heart of the new Nordic production system. These mills are integrated steel production facilities with the capacity of carrying out all steps of steelmaking from melting fossil-free sponge iron and scrap to rolling products.

The new mills will typically have an electric arc furnace, a ladle furnace or vacuum furnace for precision control of chemistry, a strip or billet continuous caster for converting molten steel to solid form, a reheat furnace and a rolling mill.

In June 2023, we decided to invest in an electric arc furnace in Oxelösund. And in April 2024, the investment decision was made for the transformation of the Luleå site. The third step planned is for the transformation of Raahe, Finland. The Raahe project timing will depend on SSAB’s financing and execution capacity, as well as the learnings from the Luleå project.

Transforming our production system will not only considerably contribute to the reduction of CO₂ emissions, but also make us even better placed for higher profitability.

Looking ahead, traditional steel will be more costly over time as free ETS allocations are gradually phased out and reach zero by 2034, leading to increased emission costs. Higher marginal costs with the existing blast furnace technology makes growth unsustainable and uneconomical. The ETS allocation and CO₂ price make the EU cost curve “steeper” which supports healthier dynamics. Rebuilding our strip production system is also a leap toward a better cost position, greater flexibility, shorter lead times and more capacity for further processing. This allows us to meet future customer demands for more dimensions of specialty and high-strength steels with low or no CO₂ emissions.

In a blast furnace, coal is used to remove the oxygen from the iron ore, and the end product is liquid iron. Since this process uses coal and produces large amounts of carbon dioxide, it is neither economically nor environmentally sustainable in the long term.

SSAB’s blast furnaces in the Nordics are already today among the most efficient in the world, emitting less than average amounts of CO₂ emissions and using high-grade iron ore pellets and high-quality coke, but still our blast furnaces account for more than 90% of SSAB's CO₂ emissions. This means that the blast furnaces have to be replaced by other technologies.

When transforming the Nordic production system, the blast furnaces will be decommissioned and electric arc furnaces (EAFs) will take their place in Oxelösund as well as in the new mini-mills projected for Luleå and Raahe.

In an EAF, recycled steel or fossil-free sponge iron is melted into liquid form. Since the electric arc furnace can be easily started and stopped on a regular basis, the mills can swiftly be adjusted to market demand, operating on 24-hour schedules when demand is high and cutting back production when sales are lower.

Resource scarcity, urbanization and climate change - combined with increasing need for new infrastructure - create a growing need for more sustainable solutions. Given their quality, SSAB’s high-strength steels have already enabled our customers to achieve CO₂ savings. Our decarbonized steels will enable our customers to reduce their carbon footprints even further, safe in the knowledge that their products are manufactured from premium materials using only fossil-free energy sources.

SSAB is revolutionizing steelmaking with two unique decarbonized steels – paving the way for a greener future. Together with our partners and customers, we are establishing fossil-free value chains, from the mine all the way to the end-product.

As an example, automakers and their subcontractors want to sign cooperation agreements to be able to take stock of the properties of fossil-free steel before the future ramp-up of volumes. Our shipments of advanced high-strength steel (AHSS) products in the automotive segment reached a record high level in 2024.

Spring 2023 saw us launch SSAB Zero^™, a unique steel emitting virtually zero fossil carbon emissions. Thanks to our flexible production system, we can process the steel downstream in both the USA and Europe, and ship to customers all over the world. We shipped more than 50,000 tonnes of SSAB Zero^™ in 2024.

The mining and steel industry in Sweden has been – and is – an invaluable strategic asset. It supplies steel to basically all large industrial manufacturers in the Nordics, as well as to a large number of small and medium-sized companies. Without domestic mining and steel production, the conditions for manufacturing industries in Sweden would significantly deteriorate.

SSAB’s green transformation is among the most important changes in the steel industry for decades. It’s not only about new technology that reduces carbon dioxide emissions to basically zero. We’re also introducing a new production logic that makes us faster, more flexible and more resistant to economic cycles.

This transformation meets the requirements of the global political agenda: reduction of emissions, green transition, jobs and competitiveness. For the transformation to become a reality, the required infrastructure must be in place in time as well as the availability of competitive fossil-free electricity.

Fossil-free energy will be key to enable the transition. SSAB's Nordic production facilities currently consume 1.6 TWh of electricity annually. When the blast furnaces are replaced with electric arc furnaces, the use of electricity will increase to around 4.5 TWh, of which 2.5 TWh in Sweden. This can be compared with an electricity surplus of 33 TWh in Sweden in 2022. Scaling up the pilot production of sponge iron to a commercial scale requires an additional 5 TWh within the framework of the HYBRIT collaboration with LKAB and Vattenfall.

All fossil-free power sources will be needed going forward and we assume that policy-makers will provide long-term conditions for securing competitively priced fossil-free electricity. The extension of transmission capacity must be rapid with as few lines as possible but with as much power as possible. When allocating capacity, both social and climate benefits will have to be taken into account to a greater extent than today. The existing capacity must in turn be optimized allowing for more flexible and precise usage.

Simplified, faster and more predictable permit processes for new mines, industrial facilities and power lines will be needed. As an example, environmental permit processes – similar to the EU Commission’s proposal in REPowerEU – should be shortened to a maximum of 12 months. Assessments should weigh together environmental, climate and social benefits in permit processes and land allocation.

We think that there should be a cost to emit CO₂ and that there should be clear incentives for a quick transformation. It is positive that the EU has agreed on new rules for emissions trading with a clear timetable for phasing out emission allowance. It’s a leap forward that the system includes new, more CO₂ efficient technologies such as hydrogen-based production.

In the proposal for the border adjustment mechanism (CBAM), it would have been good to take exports from the EU into account since they face different competitive conditions on global markets, for example steel produced in countries without costs for CO₂ emissions.

To support frontrunners that develop breakthrough technologies, take risk and make green investments, there is a need for an enabling policy framework with the EU and on global markets, ensuring a level playing field. We think that government support and de-risking are relevant in the field of R&D and upscaling of new technologies. Public funding of already commercially available technology may entail an unwanted risk of a subsidy race.

To succeed in the transition, there is a need for effective frameworks, political leadership and action rather than general subsidies.

A number of SSAB's competitors in Europe have received state aid. SSAB has not assumed it will receive any significant aid in its plans to implement the transformation, but at the same time it is important to have a level playing field in terms of state aid to prevent a distortion of competitive conditions. The HYBRIT initiative, in which SSAB has a 1/3 stake, has received EUR 143 million in support from the EU's Innovation Fund as well as SEK 520 million from the Swedish Energy Agency. LKAB has been further granted SEK 3.1 billion for construction of the demonstration plant outside of Gällivare. December 2024, SSAB was granted SEK 1.45 billion in the framework of the Just Transition Fund, an EU fund that in Sweden includes support to the transition of the steel industry in Norrbotten. The funding will contribute to the transformation to fossil-free steel production of SSAB’s operations in Luleå.

For a successful transformation to a new production system, the supply of skills is absolutely crucial. This places new demands on our know-how. Therefore we attach great importance to the further training of our staff.

SSAB has several internal development programs for different levels of the organization, such as an internal business development program and a training module for middle managers. We also have trainee programs, for example with a focus on digitalization. Moreover, we focus on competence development in connection with the planned transformation of the Nordic sites.